In 2006, Wal-Mart and Citibank were victorious in making Chinese acquisitions. Wal-Mart purchased Trust Mart, the chain store with the 11th largest sales volume in China in early 2006. Citibank won the ability to control Guangdong Development Bank, the third most profitable small and medium-sized commercial bank in China.

While transnational mergers and acquisitions have become a way to get more than a foothold in China, their spread indicates that China's market opening in 2006 was indeed broad.

Still regulating

Under China's WTO commitments, the transitional period ended on December 11, 2006. But even before this deadline, many industries had entered into the stage of free competition.

At the beginning of 2006, the Chinese Government, in order to make rational and effective use of foreign capital, drew up regulations on real estate and other sectors leaning toward monopolies or causing environmental pollution. Deemed restrictive by foreign companies, these policies caused some to worry that foreign investment would decrease, and this worry became the reality for some time. According to statistics from the Ministry of Commerce, from January to September, for instance, paid-in capital totaled $42.59 billion, dropping 1.52 percent compared with the same period last year.

However, foreign companies' favorable stance toward the Chinese market changed this trend in October. During that month, paid-in capital increased 15.92 percent year on year to $5.99 billion, raising the growth rate of the aggregate paid-in capital in the first 10 months to 0.34 percent over the year-earlier period.

At the same time, in 2006, China made a significant adjustment to its trade strategies. It rectified its tax rebate policy, reducing or even abolishing tax rebates on export products with high energy consumption and high pollution but low added value, while increasing rebate rates to exporters of hi-tech products. Further, it adjusted export and import tariff rates, increasing export tariff rates on resources and products of high-energy consumption and high pollution, but reducing import tariff rates on resources and products of science and technology. Changes in tax rebates and tariff rates restrained the impetus of products with low added value but enlarged imports of hi-tech products.

China's fulfillment of its WTO commitments related to reducing the overall tariff level allows abundant inflows of international commodities into China. The country's imports are catching up with its exports, and more and more international commodities are consumed in the Chinese market. This is good news to the world economy, since expanded Chinese consumption of foreign commodities can stimulate the growth of the world economy.

Hot, stable growth

"The Chinese national economy has kept a steady and rapid growth," said the Development Research Center (DRC) of the State Council in a research report on the Chinese economy released in November. The DRC research focuses on development trends in the Chinese economy.

But this stability is rooted in the strengthening of macroeconomic control measures adopted by the Chinese Government. In late 2005, China implemented a series of control measures, which have achieved some effects. But just when observers expected stable economic cooling in 2006, the economic performance in early 2006 made them wonder whether the economy was overheated. In the first quarter alone, fixed assets investment in urban areas surged 29.8 percent over a year ago, which was 4.5 percentage points higher than the rate in the same period last year. Newly increased loans were as high as 1.26 trillion yuan, accomplishing 50.3 percent of the amount for the whole year. The fast growth of fixed assets investment and newly increased loans led to overheating tendencies. Under these circumstances, the Chinese Government has to strengthen its macroeconomic control measures.